One Criticism of the Bertrand Pricing Model Is That

question 13

Multiple Choice

One criticism of the Bertrand pricing model is that

• A) the model is implausible when there is product differentiation.
• B) when there is an oligopoly with no product differentiation, the model's prediction is inconsistent with reality.
• C) the model's predicted price is solely a function of demand conditions.
• D) the model's predicted price is dependent on the number of firms.

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Definitions:

Manufacturing Overhead

All indirect costs related to manufacturing, such as utilities, maintenance, and depreciation of equipment, not directly tied to the production of goods.

Job-Order Costing

A method of costing that collects costs for each individual job or batch of goods produced, as opposed to process costing.

Overapplied Overhead

A situation where the allocated manufacturing overhead costs are higher than the actual overhead expenses incurred.

Raw Materials

The basic materials from which products are made, which have not yet been processed or used in manufacturing.